BT revealed the Government cap on the use of Huawei kit in the nation’s telecoms infrastructure will cost it more than £500 million over the next five years.
Chief executive Philip Jansen also warned the Government needs to take urgent action if it is serious about hitting its target of having ultrafast internet across Britain by 2025.
Boris Johnson and his ministers put a 35% limit on Huawei in the new 5G and full-fibre future, a move seen as a compromise that stopped far short of the outright ban called for by Washington. BT’s acknowledgement of the cost of spreading its business across other suppliers — Nokia and Ericsson are two of the likely beneficiaries — is the first indication of how costly the Huawei ruling could be for the industry. BT shares fell 4% to 168p on news of the half-a-billion-pound hit.
Jansen said while “security is really important” the decision will hit BT’s plans. The £500 million is just an initial estimate, it could go higher.
BT is already rolling out 5G using Huawei radio equipment, although it will not be using it in the core. It is removing the Chinese company’s kit from the core of its 4G network. On broadband, Jansen said Whitehall, Number 10 and Ofcom need to let the telecoms giant know how much return it can make on what would be a multi-billion pound investment.
The consultation with the industry on how best to meet the goals set out by Johnson lasts another year, he notes. “That is a year missed,” he said. “Things are not moving as fast as we would like.” Jansen wants clarity on the so-called “fair bet” rules which dictate how much profit BT can make on broadband in the long term. Without it, he can’t get shareholder backing to begin a project he has said will cost £30 billion and require 30,000 staff to complete on time. He is said to have introduced a less formal atmosphere at BT and sought to encourage entrepreneurship at a business regarded as sluggish.
BT results for the nine months to December were slightly below City expectations. Revenue was down 2% at £17.2 billion. Profit fell 3% to £1.9 billion. Graham Spooner at The Share Centre said: “Despite CEO Philip Jansen being ‘really excited about the long-term prospects’, there remain challenges for him to work on in order to make BT ‘bolder, smarter and faster’.”
